Explained: the advantages of renting over buying

The perceived wisdom in the UK has always been that renting a home is a temporary solution and that people's ultimate aim should be home ownership.

In the last decade or so, however, things really have been changing, with owner occupancy rates falling and the number of private renters increasing. According to the latest English Housing Survey (EHS), private renters now account for 20% of the population while the proportion of owner occupiers has fallen from a peak of 71% in 2003 to around 63%.

With this surge in private renting becoming so apparent, there’s certainly a range of compelling arguments for being a part of the Private Rented Sector (PRS) over owning a home in the current climate.

Here's four key benefits of renting over buying...

Flexibility

One of the most common reasons given for enjoying renting is the flexible lifestyle it offers. In fact, over a quarter of the 20,000 tenants we spoke to as part of our Tenant Survey 2017 ranked 'flexibility to move easily' as the thing they like most about renting.

Unlike when you've purchased a property and you have a mortgage to think about as well as a lengthy sales process to consider if you want to relocate, changing properties when renting is a lot quicker and more straight-forward.

The vast majority of tenancy contracts are either six months or one year, meaning tenants are free to move regularly if they wish. On top of this, most agreements will allow you to leave a tenancy while it's still on-going, providing you can find a replacement renter.

Being able to change properties frequently allows tenants to experience different areas and locations. This is a particularly popular option in cities like London, where a high proportion of the renting population are not natives. What's more, tenants can experience different property types and living arrangements to find out what works best for them - from flats and apartments to house shares or even a house boat!

Living with friends

Another benefit of renting is that it provides more opportunities to live with friends. What's more, the boom in flat sharing presents people with a range of opportunities to make new friends for life.

Living with a group of friends is no longer just for students - hordes of young professionals now share rental properties in the UK's largest cities with the aim of minimising costs and maximising social opportunities.

According to our Tenant Survey, around 15% of tenants share with other renters. We found that couples with no children sharing is the most common living arrangement.

The PRS is not solely occupied by young professionals and couples, though. According to the EHS, the number of families with children privately renting has increased by 6% - equivalent to almost one million additional households - in the last decade.

Home moving costs

It's well-known that moving home can be a costly process - and it's something that discourages renters from leaving the PRS. However, up to two thirds of prospective buyers are still underestimating how much it costs to move, according to recent research by Post Office Money and the Centre for Economics and Business Research.

The report suggests that overall moving costs increased by 25% from £7,590 to £9,472 between 2006 and 2016. The highest increase for an individual service was 53% for surveyors, with the average cost up from £498 to £764.

Average conveyancing costs have increased by 37%, while removals and stamp duty have increased by 13% and 2% respectively.

Moving in to a rental property, on the other hand, is arguably much cheaper. You'll of course have a deposit to pay (if you're moving between properties, you should be able to carry over some or all of your previous deposit) and a few other admin fees like tenant referencing. You won't, though, have to pay for a survey, stamp duty or conveyancing and it's saving on these costs that makes the rental moving process much more affordable.

The difficulty of purchasing

In recent years, there have been plenty of reports detailing how difficult it is for first-time buyers to get on the property ladder. Continually rising house prices, increased living costs and a lack of available properties have combined to make home ownership a distant dream for many people in their 20s and early 30s.

Our research found that 46% of tenants are saving for a house deposit, this figure is down from 47% in 2015. We asked those who are still saving why they are yet to buy. Some 48% of respondents said it's due to high house prices and deposits, 25% said it is because they're unable to save for the initial deposit and fees and 13% said they can't meet mortgage lending requirements.

Other reasons given include lack of available property and not having enough money to meet monthly mortgage payments.

Tenants are increasingly staying for the long-term and it's often due to the reasons above. Our study found that 34% of tenants intend to rent for another one to three years, and 21% intend to rent for longer than three years. Only 8% said they will no longer be renting within six months and 13% indicated they would leave the PRS within a year.

Research from the Deposit Protection Service corroborates this. Almost 40% of 1,000 renters surveyed said they were not actively looking to buy a property and that they would continue to rent long-term.

That's not to say that tenants aren't still interested in owning a property one day. Some 65% of the people we spoke to said that they see renting as their lifestyle at the moment but that they will want to buy somewhere in the future.

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